The first-time home buyer incentive

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers:

• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment. 

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:

(i) where the home’s value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or

(ii) where the home’s value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.

LEARN MORE ABOUT THE FIRST-TIME HOME BUYER INCENTIVE

Looking for homebuying tools and resources?

Knowing what to expect throughout the entire homebuying process can lead to more well-informed decisions, and a better homebuying experience overall.

Check out all of CMHC’s homebuying tools and resources to help you make your homebuying decisions with confidence.

 Guides

• Homebuying Step by Step Guide and Workbook – Find everything you need to help you buy a home in Canada, including worksheets, calculators and checklists.
• Condominium Buyer’s Guide – Get detailed information on buying a condominium.
• Newcomers’ Buying Guides – Read homebuying information in 8 different languages!

Calculators

• Affordability Calculator – Estimate how much mortgage you can afford.
• Debt Service Calculator – Compare monthly debt payments and expenses to income.
• Mortgage Calculator – Explore rates, payment frequency, amortization options and more.

Other useful information

• Your Credit Report – Learn more about the simple steps you can take to maintain a good credit history and improve your chances of being approved for a mortgage.
• Mortgage Planning Tips – See how planning your mortgage in advance can help you save money in the long run.
• Mortgage Fraud – Read these valuable insights that can help protect you from mortgage fraud.